Popular Rates Bet Linked to Dutch Pensions Is Starting to Flag

European rates traders are cooling on one of the year’s most popular bets.

Investors have piled into wagers that pay out if long-dated European government bonds and interest-rate swaps do worse than their shorter peers. The steepening trade — so called for long-end yields rising more than the shorter ones — has largely played out as expected. But in recent weeks momentum has faded.